If the Price U

question 120

Multiple Choice

If the price U.S. consumers pay with a quota on an imported good exceeds the price they pay without a quota, then the quota was set

• A)above the equilibrium quantity without a quota.
• B)below the equilibrium quantity without a quota.
• C)sometimes above and sometimes below the equilibrium quantity without a quota.
• D)equal to the equilibrium quantity without a quota.
• E)to allow a different quantity of imports than a tariff.

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Definitions:

Compound Value

The future value of an investment, including the principal and the compounded interest over time.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window. Alternatively, it can represent the rate used to discount future cash flows in present value calculations.

Present Value

The today's worth of future money or cash flow sequences, when a certain rate of return is applied.

Discount Rate

In finance, the discount rate is the interest rate used to determine the present value of future cash flows.